TO: | Honorable Vicki Truitt, Chair, House Committee on Pensions & Investments |
FROM: | John S. O'Brien, Director, Legislative Budget Board |
IN RE: | HB1105 by McClendon (Relating to the state contribution to the Teacher Retirement System of Texas, including a one-time supplemental payment and an adjustment to the standard service retirement annuity. ), Committee Report 1st House, Substituted |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2008 | ($173,784,413) |
2009 | ($182,643,058) |
2010 | ($191,944,635) |
2011 | ($201,711,290) |
2012 | ($211,966,278) |
Fiscal Year | Probable Savings/(Cost) from GENERAL REVENUE FUND 1 |
Probable Savings/(Cost) from EST OTH EDUC & GEN INCO 770 |
Probable Savings/(Cost) from TRS TRUST ACCOUNT FUND 960 |
Probable Revenue Gain/(Loss) from TRS TRUST ACCOUNT FUND 960 |
---|---|---|---|---|
2008 | ($173,784,413) | ($8,631,911) | ($178,428) | $182,594,752 |
2009 | ($182,643,058) | ($9,063,507) | ($187,349) | $191,893,914 |
2010 | ($191,944,635) | ($9,516,682) | ($196,717) | $201,658,034 |
2011 | ($201,711,290) | ($9,992,517) | ($206,553) | $211,910,360 |
2012 | ($211,966,278) | ($10,492,142) | ($216,880) | $222,675,300 |
The provisions of the bill related to the supplemental benefit would increase the unfunded actuarial accrued liability by $410 million and would increase the state contribution rate required to amortize the liability within the 30-year period required by statute by 0.1 to 6.7 percent.
The estimated cost of the requirement to increase the state contribution rate from a minimum of 6.00 to 6.70 percent is $183 million in All Funds in fiscal year 2008 and $192 million in All Funds in fiscal year 2009. These costs would be expected to increase at a similar rate annually and would be ongoing.
Since the minimum required state contribution rate required by the bill is equal to the contribution rate required to amortize the unfunded liability, including the supplemental benefit provided by the bill, within the 30-year funding period, the supplemental benefit does not violate TRS funding statutes.
Source Agencies: | 323 Teacher Retirement System
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LBB Staff: | JOB, KJG, UP, JSc
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